NCPA Commentary

Forgetting The “First, Do No Harm” Principle

Health care providers generally take some form of the Hippocratic Oath where they recite the famous phrase, "first, do no harm" upon setting out to care for patients. It's a shame that the decision-makers who set health care policy occasionally fail to meet that simple standard. An unfortunate example has been the Centers for Medicare and Medicaid Services' (CMS) policies regarding exclusionary "preferred pharmacy" plans in the Medicare Part D prescription drug program. Despite statutory language to the contrary, CMS has historically approved these plans. More recently, CMS proposed revising this misguided approach with a more reasonable solution, but when faced with political pressure, retreated to the unacceptable status quo, at least for now.

Issues related to exclusionary pharmacy networks began in 2010 when Walmart and Humana announced the offering of a "preferred pharmacy" plan for Medicare Part D, one that heavily marketed attractive premiums and co-pays but glossed over the fine print. Under this plan, beneficiaries pay more if they do not use the "preferred" Walmart pharmacies. The plan did not even offer other pharmacies the opportunity to participate in the network under the same terms and conditions. CMS not only approved this initial arrangement, but allowed other large insurance companies to offer preferred pharmacy plans that only included national pharmacy chains.

All too often seniors unwittingly choose these aggressively—and often deceptively—marketed plans. Lured by the promise of savings (which do not necessarily materialize), beneficiaries are often surprised to learn that using their community pharmacy of choice may no longer be a viable option due to higher co-pays imposed by the plan. In rural areas, beneficiaries may face a 20 mile trip to reach the plan's designated "preferred" pharmacy (likely passing several community pharmacies along the way). Making matters worse, in approximately 1,800 rural communities, independent community pharmacies—which are rarely invited or allowed to be part of preferred plans—are the sole pharmacy provider.

CMS attempted to rectify this anti-competitive, anti-patient injustice by ensuring that the "any willing provider" provision already in the law also applies to preferred pharmacy networks in its proposed rule for 2015 Medicare Part D drug plans. If, for example, an independent community pharmacy is willing to accept preferred pharmacy contract terms and conditions, under CMS' proposal the pharmacy would be afforded the opportunity to participate. Since independent community pharmacies consistently rate highly in surveys, this was a welcome development for seniors. Many consumer-focused groups also supported this common-sense change such as the National Consumer League, the Service Employees International Union (SEIU), the American Federation of State, County and Municipal Employees, and U.S. PIRG. In addition, significant bipartisan support exists in the U.S. House of Representatives, where 28 members organized by Representatives Morgan Griffith (R-Va.) and Peter Welch (D-Vt.) signed a letter to CMS about this issue.

Unfortunately, a political fight ensued that mostly centered on an unrelated provision easing the requirements that Part D plans cover certain "protected classes" of prescription drugs. CMS in the face of the pressure was actually urged to withdraw the entire rule and start from scratch. After the comment period on the prosed rule closed, CMS decided to not more forward with many components of the proposed rule. Regrettably the "any willing provider" provision became collateral damage as it was set aside for the time being.

Now the strategy will include the continued pursuit of a regulatory fix and the quest for legislative fix. Consumers concerned about these exclusionary preferred pharmacy networks should go to www.Fight4Rx.org to get involved. Independent community pharmacists will continue to keep the pressure up, not only for the sake of our profession, but most importantly for the millions of seniors who rely upon us for their prescription drug services.